Heat Pump Sector Deal Expert Advisory Group: final report

6. The scale of the change

Deployment of heat pumps at the pace and scale necessary to meet the Scottish Government's 2030 and 2045 carbon emissions reduction targets is achievable but will require significant and rapid action.

Looking at the change required in terms of scaling, the Scottish Government's Heat in Buildings Strategy ambition is, as a minimum, to see the rate of zero carbon heating system installations in new and existing homes and buildings double every year from the current baseline to at least 64,000 installations in 2025, which is very rapid growth. Installation numbers will then need to continue to grow significantly to a peak of over 200,000 new systems per annum in the late 2020s.

Using a different perspective and looking at the scale of change required in terms of absolute numbers. The Scottish Government's Heat in Buildings Strategy doesn't explicitly specify the number of heat pumps needed in Scotland's future energy system but it describes the need for at least 50% of the building stock to use zero emission heating systems by 2030. This implies around a million homes switching from fossil fuel boilers to alternative systems over the course of the 2020s as well as substantial numbers of other buildings.

The Heat in Buildings Strategy identifies individual heat pumps and heat networks with large-scale heat pumps as the source of heat as the two primary technologies which will deliver the above ambitions over the next decade. However, is not clear what proportion of buildings will follow each route. The Heat Network (Scotland) Act sets statutory targets for the supply of thermal energy through heat networks and these targets are ambitious, requiring 6 TWh by 2030. If all this heat was supplied to domestic properties then this would be equivalent to around 650,000 homes connecting to heat networks by 2030. However, in practice a significant proportion of this heat will be supplied to large industrial, commercial and public sector buildings. This will leave a very large market for individual heat pump systems, particularly in lower density areas where heat network infrastructure isn't cost effective.

Although there are some complementary aspects, the skills and supply chain required to build and service large scale heat network infrastructure are largely separate from those required to support a scaled deployment of individual systems with smaller heat pumps. Each area presents its own challenges and will require targeted investment in the supply chain and its workforce. For this reason it would be beneficial to have greater clarity as to the interactions between these various Scottish Government targets in order to provide maximal certainty to the industry as to the market size for each size of heat pump. This could be done through the Scottish Government's statutory requirement to provide a heat networks delivery plan and the proposed statutory duty for local authorities to produce Local Heat and Energy Efficiency Strategies.

Nevertheless, for the purposes of this report, one crucial point is already fully clear and drives the analysis and recommendations below. This is that irrespective of the final proportion of heat networks in the mix, very large numbers of heat pump installations will be required and so the need for rapid acceleration of heat pump installation capacity and rate remains urgent in all scenarios.

A final clear conclusion, from the scale and pace of the challenge presented by the heat pump roll-out, is that all possible levers will need to be applied simultaneously. The report makes a number of recommendations below but is important to note that whilst each will certainly result in positive change, a piecemeal approach will not meet the scale of the challenge, if there are to be hundreds of thousands of heat pumps in place by the end of the decade, all recommended actions will be required.